FCC approves Intelsat’s exit from bankruptcy
February 21, 2022
The FCC has approved Intelsat’s exit from Chapter 11 bankruptcy and the transfer of the ‘old’ company’s ‘debtor in possession’ (DIP) assets to the newly established parent business based in Luxembourg.
The FCC’s International Bureau chief Thomas Sullivan said the transfer was in the public interest and approved the request.
The FCC ruling explains the current situation, saying: “Intelsat DIP plans to emerge from bankruptcy with a new ultimate parent company, Restructured Intelsat, a Luxembourg company that would be privately held by the creditors receiving equity in Restructured Intelsat as a result of the restructuring plan.”
“Pacific Investment Management Company LLC (PIMCO), a Delaware limited liability company serving as the investment advisor for its managed funds, would indirectly hold approximately 32.8 per cent of the voting and equity interests in Restructured Intelsat. The ultimate parent of PIMCO is Allianz SE, a German company,” adds the FCC document.
“Other than companies in the PIMCO ownership chain, the Applicants expect that no other shareholder would directly or indirectly hold 10 per cent or more of the voting or equity interests in Restructured Intelsat,” states the FCC. This paragraph echoes the statements already made by Intelsat.
However, the FCC has insisted that ‘new’ Intelsat must maintain its obligation to properly fund the public service obligations of the International Telecommunications Satellite Organisation (ITSO). ITSO had been in dispute with Intelsat and arguing that it was not being adequately funded by Intelsat. Intelsat had alleged that there had been mis-spending and waste at ITSO.
The FCC document states: “[‘New Intelsat’] will have a more stable financial and legal position than previously, and the ITSO Chair does not raise any concerns specific to the restructuring plan or the associated ownership changes. Although the ongoing controversy is understandably a matter of concern for the ITSO membership, the ITSO-related conditions on Intelsat space station licenses are not an additional enforcement mechanism for the Public Services Agreement between ITSO and Intelsat. Indeed, it is long-standing Commission policy not to involve itself with particular contract disputes, and we do not depart from that policy here. However, consistent with the Commission‘s licensing authorities, in the event that Intelsat does not continue to remain in compliance with these existing licensing conditions the Commission can take appropriate licensing action.”